Philippines President Duterte axes all online gambling in the country, or maybe not

In a sweeping move seen as the reversal of an earlier pledge to allow online gambling operations in the Philippines, President Rodrigo Duterte has ordered the plug pulled on all online gambling in the country.

After signing the General Appropriations Act of 2017 on Thursday, December 22, Duterte announced,
“I am ordering the closure of all online gaming, All of it. It has no use.”

In August he had promised to allow the businesses, which generate considerable revenues for the country with mostly Asian facing casinos, as long as all operators paid proper taxes and a trust fund was set up to provide medicine for the nation’s considerable poor population. Other conditions referred to PhilWeb’s eGame cafés that used a form of RTG slots and provided other gambling games and sports betting. Those venues were not to be allowed near schools or churches.

Duterte said the government has no effective means to monitor online gambling or the taxation of it. It’s unclear if the president considers the eGame cafés to be online gaming. The Philippine Amusement and Gaming Corporation (Pagcor) had said earlier that the eGame cafés would receive a new license after being revoked earlier. The cafés were reportedly expected to open in the next few days.

Leading up to the president’s decision may have been the arrest of over 1,300 Chinese nationals found operating a casino call center at Fontana Leisure Park in late November. In the last few days, some 600 of them have been released on bail, all were undocumented workers with most having overstayed their visas. The casino and another operated by Macau junket businessman Jack Lam were shuttered in early December.

Pagcor had only recently begun offering online gambling licenses. About 75 online casinos serving offshore gamblers are licensed in the Cagayan Special Economic Zone (CEZA). First Cagayan “monitors over 50 operators” and has issued over 135 licenses according to their website. The Aurora Special Economic Zone and Freeport Authority (APECO) had also recently begun offering online casino licenses.

This article has been updated with the following information:

It would seem that Philippine President Rodrigo Duterte has either changed course once again or asked Justice Secretary Vitaliano Aguirre II to clarify an unambiguous statement widely reported by local media on Thursday that Duterte was, “ordering the closure of all online gaming, All of it. It has no use.”

Today The Standard is reporting that the president ordered his Justice Secretary to investigate: “I was given a marching order to investigate the Peza and online gambling… I have talked with [Executive Secretary Salvador] Medialdea and [Special Assistant to the President] Bong [Go], they are now drafting the scope of my authority to investigate online gambling,” The Standard reports Aguirre has said.

Duterte has reportedly said that the action stems from Jack Lam’s online gambling operations which were taking place from the Fontana resort.

There are widely varying reports coming out of the country from a call to arrest the head of the Philippine Economic Zone Authority (PEZA) to the possibility that all licenses other than the new Philippine Offshore Gambling Operator (POGO) issued by Pagcor would be revoked and operators could continue business with one of the new licenses. In early October Pagcor confirmed that 76 operators had applied for the first 25 licenses supposed to become available. On December 2 the Philippine Star reported that “about 35” of the licenses had been issued.

While not a gambling regulator and not usually associated with online gambling in the Philippines, PEZA has over 300 economic zones spread across the country. Many are business process outsourcing and knowledge process outsourcing firms, which definition may bring Jack Lam’s shuttered Fontana call center into the picture, but that is still unclear.

With a flair for the unexpected, readers can expect an ever-changing story until Duterte’s ‘war on gambling’ settles out.